M/s. AGM Holdings Limited, New Delhi V. DCIT, New Delhi

ITA 1667/DEL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6595 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-01-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 21-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Keywords: Unexplained cash credit; Deemed to accrue or arise in india; Additional evidence; Accommodation entries
• Section: 133A; 68; 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A , NEW DELHI BEFORE SHRI H.S.SIDHU, JUDICIAL MEMBER AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 1 667 / DEL/201 4 AY: 200 8 - 09 AGM HOLDINGS LTD. VS. DCIT, CENTRAL III 308, ARUNACHAL BLDG. NEW DELHI 19, BARAKHAMBA ROAD NEW DELHI 110 001 PAN: AAFCA 1314 F (APPELLANT) (RESPONDENT) APPELLANT BY : SH. K.SAMPATH, ADV. AND SH.RAJA KUMAR , ADV. RESPONDENT BY : SH. KK JAISWAL, D.R. ORDER PER J. SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE LD.COMMISSIONER OF INCOME TAX (APPEALS) - XXXIII, NEW DELHI DATED 6.11.2013 PERTAINING TO THE ASSESSMENT YEAR (A.Y.) 2008 - 09. 2. THE FAC TS OF THE CASE ARE BROUGHT OUT AT PARA 4.1 OF THE LD.CIT(A) ORDER. THESE ARE EXTRACTED FOR READY REFERENCE. 4.1 THE BRIEF FACTS OF THE CASE ARE AS UNDER: - THE RETURN OF INCOME FOR THE A.Y. 2008 - 09 WAS FILED ON 05/02/2009, DECLARING TOTAL INCOME AT RS. 24,45,690/ - . SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY & NOTICE U/S 143(2), DATED 24/08/2009 WAS DULY SERVED UPON THE ASSESSEE BY SPEED POST. IN RESPONSE TO THE SAID NOTICE FROM TIME TO TIME, SH. ABHIJIT KANTH, AR, ATTENDED THE OFFICE ON BEHALF OF A SSESSEE & SUBMITTED THE 2 NECESSARY DETAILS & CLARIFICATIONS AS PLACED ON RECORD. THE.DETAILS SUBMITTED WERE DISCUSSED WITH HIM. 2. A SURVEY OPERATION WAS CONDUCTED IN THE S.K. GUPTA GROUP OF CASES ON 20 .11.2007 AT 308, ARUNACHAL BUILDING, 19, BARAKHAMB A ROAD, NEW DELHI - 110001 AND 1007 - 1008, ARUNACHAL BUILDING, 19, BARAKHAMBA ROAD, NEW DELHI - 110001. THE ASSESSEE COMPANY IS ONE OF THE GROUP CONCE RNS OF S.K. GUPTA GROUP. DURING THE COURSE OF SURVEY PROCEEDINGS AND ASSESSMENT PROCEEDINGS. SH. S .K. GUPTA ADMITTED THAT HE HAD BEEN PROVIDING ACCOMMODATION ENTRIES TO VARIOUS PERSONS THROUGH A LARGE NO. OF CONCERNS EFFECTIVELY CONTROLLED BY HIM. FURTHER, IT WAS SEEN THAT SH . S.K. GUPTA OPERATES A NUMBER OF ACCOUNTS IN THE SAME BANK/BRANCH OR IN DIFFERENT BRAN CHES, IN THE NAMES OF COMPANIES/FIRMS/PROPRIETARY CONCERNS AND INDIVIDUALS. F OR THE OPERATION OF THESE BANK ACCOUNTS, PERSONS WHO ARE FILING INCOME TAX RETURNS ARE ROPED IN. LIKE ANY OTHER BUSINESS IT DOES REQUIRE MAN POWER ACCORDING TO THE SCALE OF OPER ATIONS. EXCEPT FOR TWO OR THREE PERSONS WHO ARE REQUIRED REGULARLY TO VISIT BANKS AND DO OTHER WORK LIKE COLLECTION OF CASH ETC. MOST OF THE OTHER PERSONS INVOLVED ARE ON PART TIME BASIS. THE PART TIME EMPLOYEES ARE CALLED AS AND WHEN REQUIRED TO SIGN DOC UMENTS, CHEQUES BOOKS ETC. SH. S.K. GUPTA HAS ALSO ROPED IN HIS OWN RELATIVES FOR OPERATION OF VARIOUS BANK ACCOUNTS AND FOR FILING THE INCOME TAX RETURNS. IT WAS SEEN THAT SH. S.K. GUPTA WAS CONTROLLING MORE THAN 35 COMPANIES FROM A SMALL OFFICE PREMISES WITHOUT SUFFICIENT INFRASTRUCTURE OR EMPLOYEES TO CARRY OUT MEANINGFUL BUSINESS ACTIVITY IN SO MANY COMPANIES. 2.1 FURTHER, FROM THE PERUSAL OF LEDGER ACCOUNTS MAINTAINED IN ONE OF THE LAPTOPS IMPOUNDED DURING SURVEY, IT IS NOTICED THAT A LARGE AMOUNT OF CASH IS DEPOSITED AND CHEQUES ARE ISSUED ON THE SAME DAY / WITHIN FEW DAYS TO VARIOUS PARTIES FROM THE ACCOUNTS OF THE COMPANY CONTROLLED BY HIM. AS PER ENQUIRIES CARRIED OUT BY THE INVESTIGATION WING THE ASSESSEE WAS FOUND TO HAVE BEEN USING THE BANK ACCOUNTS OPENED IN DIFFERENT BANKS TO ROUTE THE ENTRIES THROUGH TWO TO FOUR ACCOUNTS TO GIVE THE COLOR OF GENUINENESS TO THESE TRANSACTIONS. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, VIDE QUESTIONNAIRE DATED 1.11.2010 AND AGAIN VIDE QUESTIONNAIRE 02.12.2010, TH E ASSESSEE WAS ASKED TO FURNISH IDENTITY OF THE CREDITOR; THE CREDITWORTHINESS OF THE CRE DITOR S & THE GENUINENESS OF THE TRANSACTIONS U/S 68 OF THE IT ACT IN RESPECT OF ALL FRESH UNSECURED LOANS/DEPOSITS TAKEN DURING THE YEAR (INCLUDING SQUARED UP A/C , IF ANY) INCLUDING UNDER THE HEAD - SHARE APPLICATION MONEY; OTHER LIABILITIES; SUNDRY CREDI TORS; ADVANCE/AMOUNT RECEIVED ETC INDICATING FULL NAME, ADDRESS, PAN, AMOUNT OF LOAN/DEPOSITS TAKEN AND COPY OF BANK 3 STATEMENT OF THE CREDITOR FROM WHICH PAYMENT W AS MADE AND WAS ASKED TO SHOW CAUSE AS TO WHY IN THE ABSENCE OF THE SAME, THESE AMOUNT/REC EIPTS NOT BE TREATED AS ITS DEEMED INCOME U/S 68 OF' THE IT ACT, 1961. 3.1 IN RESPONSE, THE ASSESSEE VIDE ITS SUBMISSIONS DATED 07.12.2010 SUBMITTED AS UNDER. - 'THERE ARE NO UNSECURED LOANS OR DEPOSITS, NO SUNDAY CREDITORS AND NO FRESH SHARE APPLICA TION MON EY INTRODUCED OR SQUARED UP IN THE FINANCIAL YEAR 2007 - 08 ' IN FACT, THE ASSESSEE HAS FURNISHED UNCONFIRMED COPIES OF ACCOUNT FROM ITS BOOKS OF ACCOUNT OF SOME: CREDITORS UNDER THE HEAD LOANS AND ADVANCE GIVING INCOMPLETE NAMES AND NO PAN OR ADDR ESS WHATSOEVER, DESPITE VARIOUS OPPORTUNITIES GIVEN TO IT. THE ASSESSEE DID NOT SUBMIT THE CONFIRMATION, PAN, COPY OF RETURN OF INCOME OR THE COPY OF THE BANK STATEMENT OF THE CREDITOR, FROM WHICH THE AMOUNT HAS BEEN ADVANCED TO THE ASSESSEE I.E. THE ASSE SSEE COULD NOT ESTABLISH THE IDENTITY OF THE CREDITORF (S) CREDITWORTHINESS OF THE CREDITOR (S) &. THE GENUINENESS OF THE TRANSACTION ( S) AS REQUIRED U/S 68 OF THE I.T. ' ACT IN RESPECT OF ANY OF THE SUM CREDITED IN ITS BOOKS OF ACCOUNTS DURING THE FY 2007 - 08. 3.2 THE ASSESSEE IS MAINTAINING FOLLOWING BANK ACCOUNT DURING THE F.Y. 2007 - 08, SHOWING TOTAL DEPOSITS AS UNDER. - SL.NO. NAME OF THE BANK ACCOUNT NO. DEPOSITS (IN RS.) 1. OBS 05621011001579 19,24,09,627 2. HDFC 024 O.B. 3. PNB 2100064026 3,98,40,213 4. PNB 3342002100024473 45,46,20,608 GRAND TOTAL 68,68,70,448 3.3 FURTHER, VIDE QUESTIONNAIRE DATED 2.12.2010 THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF ALL DEPOSITS IN ITS BANK ACCOUNTS INCLUDING BY CASH, CHEQUES, TRANSFER (INTRA BANK) ETC. INDICATING THE NAMES AND ADDRESS OF THE DEPOSITOR/ CREDITOR & ALSO TO PROVE THE CREDITWORTHINESS OF THE CREDITORS) & THE GENUINENESS OF THE TRANSACTIO NS U/S 68 O F THE IT ACT & ASKED TO SHOW CAUSE WHY IN ABSENCE OF THE SAME THE AMOUNTS/ RECEIPTS NOT BE TREATED AS ITS DEEMED INCOME U/S 68 OF THE I T ACT? 3.4. IN RESPONSE, THE ASSESSEE VIDE ITS SUBMISSION DT. 13.12.2010 SUBMITTED AS UNDER: 4 WE ARE SUBMITTING HEREWITH THE BANK BOOK WITH NARRATION FOR THE F.Y. 2007 - 08. I.E. IN RESPECT OF SOME ACCOUNTS IT HAS FURNISHED COPY OF ONLY ITS BANK BOOK FROM ITS BOOKS OF ACCOUNTS AND DID NOT PROVIDE THE COMPLETE NAME AND NO PAN OR ADDRESS WHATSOEVER, OF THE PERSONS FROM WHOM IT HAD RECEIVED VARIOUS AMOUNTS IN CAS H/OTHERWISE DURING THE F.Y. 2007 - 08, DESPITE VARIOUS OPPORTUNITIES BEING GIVEN TO IT I.E. THE ASSESSEE COULD NOT ESTABLISH THE IDENTITY OF THE CREDITORS, CREDITWORTHINESS OF THE CREDITORS AND THE GENUINENESS OF THE TRANSACTIONS AS REQUIRED U/S 68 OF THE I. T.ACT, IN RESPECT OF ANY OF THE SUM DEPOSITED IN ITS BANK ACCOUNTS DURING THE F.Y. 2007 - 08. 3.7.3. THE VARIOUS PERSONS/CONCERNS OF SK GUPTA GROUP HAVE BEEN ARRANGED ALPHABETICALLY. TO BE FAIR TO THE ASSESSEE AND TO AVOID DOUBLE ADDITION, ALL THE UNEXPLAI NED DEPOSITS IN THE BANK ACCOUNTS OF FIRST CONCERN (AFTER GIVING CREDIT OF INTER BANK TRANSFERS AND RETURNED CHEQUES) ARE BEING ADDED IN ITS HANDS AND THEN IN THE HANDS OF THE NEXT PERSON/CONCERN IN THE SERIES, CREDIT IS ALSO BEING GIVEN FOR THE AMOUNTS RE CEIVED FROM THE PERSON/CONCERNS ABOVE LIST. THE ASSESSEE BEING THE FIRST CONCERN IN THIS LIST, NO BENEFIT IS BEING GIVEN TO THE ASSESSEE FOR THE AMOUNTS RECEIVED BY IT FROM VARIOUS GROUP CONCERNS, AS ALREADY MENTIONED IN TABLE IN PARA 3.2 SUPRA. 3.7.4. S UBJECT TO THE DISCUSSIONS ABOVE AND IN THE LIGHT OF VARIOUS PROVISIONS OF THE ACT AND VARIOUS JUDICIAL PRONOUNCEMENTS, THE AMOUNT OF RS.62,70,19,448/ - (68,68.70,448 - 5,21,35,000 - 77,16,000) CREDITED IN THE VARIOUS BANK ACCOUNTS OF THE ASSESSEE IS TREATED AS ITS DEEMED INCOME U/S 68 OF THE ACT AND IS ADDED TO ITS INCOME. (ADDITION OF RS.62,70,19,448/ - ). 2.1. ON FIRST APPEAL, THE LD.CIT(A) HELD AS FOLLOWS. I HAVE CONSIDERED THE ASSESSMENT ORDER, WRITTEN SUBMISSION, REMAND REPORT AND ARGUMENTS OF ID.AR. 4.3.1 THE MAIN ARGUMENTS OF LD. AR IS THAT THE APPELLANT COMPANY IS ONLY A CONDUIT AMONGST 32 COMPANIES OPERATED BY SH. S.K. GUPTA TO PROVIDE BOGUS 5 CAPITAL TO THE BENEFICIARIES BY TAKING CASH FROM THE BENEFICIARIES. LD. AR RELIED ON THE DIRECTION U/S 144A ISSUED BY ADDITIONAL CIT, CENTRAL RANGE - 5 , NEW DELHI FOR A.Y. 2004 - 05 WHERE HE HAS DIRECTED THE ASSESSING OFFICER NOT TO MAKE ANY ADDITION IN RESPECT OF THESE CONDUIT COMPANIES AND HE HAS DIRECTED THE ASSESSING OFFICER TO MAKE ADDITION IN THE HANDS OF SH. S .K. GUPTA FOR ENTIRE CASH RECEIVED AND IN THE HANDS OF BENEFICIARIES FROM WHOM ALLEGED CASH HAS BEEN RECEIVED. THE DIRECTION OF THE ADDITIONAL COMMISSION OF INCOME TAX, CENTRAL RANGE V , NEW DELHI HA VE BEEN COMPLIED BY THE ASSESSING OFFICER FOR THE SAID A SSESSMENT YEAR. I HAVE EXAMINED THE MERITS OF THE DIRECTION U / S 144A ISSUED BY ADDL. CLT, CENTRAL RANGE - V, NEW DELHI DT.23.11.2011.ADDITIONAL C I T, CENTRAL RANGE - V , NEW DELHI HAS NOWHERE IN HIS FINDINGS HAS STATED THAT THE NAME OF THE BENEFICIARY ARE' CON TAINED IN THE SEIZED MATERIAL. HE HAS GIVEN AN INSTANCE OF THE MEDIATOR WHO HAS BROUGHT CASH TO SH . S.K. GUPTA FOR CONVERSION FROM CASH TO CHEQUE. THEREFORE, THE CLAIM OF LD. AR THAT THE DETAIL OF BENEFICIARIES WAS CONTAINED IN THE SEIZED MATERIAL DOES NOT APPEAR TO BE TRUTH. IN ABSENCE OF MENTION OF THE BENEFICIARIES WHO HAS BROUGHT CASH IN IMPOUNDED DOCUMENT, THE SOURCE OF CASH CANNOT BE EXPLAINED ON THE BASIS OF IMPOUNDED MATERIALS. FURTHER, NOWHERE, THE BENEFICIARIES HAVE OWNED UP THE CASH. ADDL. CIT, CE NTRAL RANGE - S, NEW DELHI IN HIS DIRECTION HAS STATED THAT SINCE SH. S.K. GUPTA HAS NOT BEEN ABLE TO PRODUCE THE MEDIATORS/BENEFICIARIES, THEREFORE, THE CASH IS NOT OWNED BY THESE MEDIATORS AND BENEFICIARIES, THEREFORE, THE ENTIRE CASH SHOULD BE ASSESSED IN THE HANDS OF SH. S.K. GUPTA AND THE BENEFICIARIES AND NO ADDITION SHOULD BE MADE IN THE HANDS OF CONDUIT COMPANIES. ADDL. CIT HAS OPINED IN HIS REPORT THAT BY MAKING ADDITION IN THE HANDS OF THE CONDUIT COMPANIES WILL JEOPARDIZE THE CASE OF REVENUE TO TA X THE SAME IN THE HANDS OF SH. S.K.GUPTA AND BENEFICIARIES. I DO NOT AGREE WITH THIS VIEW. IN FACT, IT MAY BE MENTIONED THAT THAT IF IN THE HANDS OF THESE CONDUIT COMPANIES, NO ADDITION U/S 68 IS MADE, THEN THE ENTIRE BALANCE SHEET OF THESE COMPANY GETS AP PROVAL OF THE ASSESSING OFFICER THAT THE CREDITS ARE GENUINE. THEREFORE, I APPREHEND, SUCH STEP WILL HELP THE BENEFICIARY COMPANIES WHO HAVE TAKEN ENTRIES TO GET AWAY FROM TAXATION NET AS ONLY THESE CONDUIT COMPANIES HAVE PROVIDED CHEQUE TO THE BENEFICIAR Y COMPANIES. SO, CREDITORS IN THE HAND OF THESE BENEFICIARY COMPANIES AN D THESE SO CALLED CONDUIT COMPANIES ONLY. THEREFORE, THE GIVING CL EAN CHEAT TO THESE SO CALLED CONDUIT COMPANIES WILL CREATE EVIDENCE THAT THE CREDITS IN THE BOOKS OF ACCOUNTS OF THE BENEFICIARIES ARE EXPLAINED. PROBABLY, THE ADDITIONAL COMMISSIONER OF INCOME TAX WHILE ISSUING DIRECTION U / S 144A HAS MISSED THIS ASPECT, IN FACT NOWHERE, ACIT ' HAS GIVEN THE FINDINGS THAT THE CREDIT IN THE BOOKS OF ACCOUNTS OF THE CONDUIT COMPANY ARE E XPLAINED A CIT HAS IN FACT STRENGTHENED THE VIEW THAT THE CASH CREDITS IN THE HANDS OF THESE COMPANIES ARE BOGUS. 6 THE LD. A R HIMSELF ACCEPTS THAT THESE ARE CONDUIT COMPANIES, THEREFORE, ADMITTEDLY THE CREDITS IN THE BOOKS OF ACCOUNTS, OF THE APPELLAN T COMPANY ARE FICTITIOUS. THEN, THE APPELLANT SHOULD HAVE RECASTED ITS BOOKS OF ACCOUNTS AND SUBMITTED ALO NG WITH THE RETURN OF INCOME. IT IS SURPRISING TO NOTE THAT THE SURVEY ACTION IN THE CASE OF SH. S.K.GUPTA TOOK PLACE ON 20.11.2:007 WHEN THE BOOK OF ACCOUNT OF TILE APPELLANT COMPANY WAS NOT EVEN CLOSED FOR RELEVANT FINANCIAL YEAR 2007 - 08. KNOWING VERY WELL THAT SURVEY ACTION U/S 133A OF IT ACT, HAS TAKEN PLACE, THE MODUS OPERANDI OF BOGUS CREDIT HAS COME TO THE NOTICE OF INCOME TAX DEPARTMENT, THE APP ELLANT HAS CHOOSES TO STICK TO ITS FABRICATED BOOKS OF ACCOUNTS AND CLOSED THE BOOKS OF ACCOUNT AND FILED ITS RETURN OF INCO ME FOR A.Y. 2008 - 09 MUCH AFTER THE SURVEY ACTION. IN FACT, IT IS SURPRISING THAT AS ADDITIONAL EVIDENCE, LD.A R HAS GIVEN CONFIRMATION FROM THE BENEFICIARIES FOR MONEY RECEIVED FOR SUCH BENEFICIARIES TO EXPLAIN THE SOURCE OF CREDIT IN THE BOOKS OF ACCOUNTS. THEREFORE, TILE APPELLANT COMPANY AT ONE HAND IS PRETENDING THAT IT IS A CONDUIT, THEREFORE, EVEN THOUGH TH ERE ARE CREDITS IN ITS BOOKS OF ACCOUNT, SECTION 68 DOES NOT' APPLY AND ON OTHER HAND, IT IS TRYING TO PROVE ENTRIES CONTAINED IN THE BOOKS OF ACCOUNTS. THESE STANDS IN MY VIEW ARE CONTRADICTORY TO EACH OTHER. SECOND MAIN ARGUMENT OF LD. AR IN SUPPORT OF PROVING ITSELF AS CONDUIT, THE LD.AR IS RELYING ON THE ORDER OF THE: SETTLEMENT COMMISSION. I HAVE PERUSED THE ORDER OF H ON'BLE SETTLEMENT COMMISSION. THE HON'BLE SETTLEMENT COMMISSION HAS QUANTIFIED THE INCOME OF SH. S.K. GUPTA AS SOME PERCENTAGE OF TOT AL TURNOVERS, OF COURSE, IN ITS ORDER, HON'BLE COMMISSION HAS MENTIONED THAT VARIOUS COMPANIES INCLUDING APPELLANT COMPANY IS USED AS CONDUIT FOR ROUTING THE ENTRIES. HOWEVER, BEFORE SETTLEMENT COMMISSION, ENTIRE FACTS THAT THE APPELLANT COMPANY IS MAINTAI NING ITS BOOKS OF ACCOUNT ON THE BASIS OF SUCH ENTRIES MIGHT NOT BE AVAILABLE, HON'BLE SETTLEMENT COMMISSION HAS NOT GIVEN ANY COMMENTS FOR CREDIT IN THE BOOKS OF ACCOUNTS OF THE APPELLANT COMPANY WHICH IS NOT CHANGED AFTER ADMISSION THAT IT AS A CONDUIT C OMPANY. THEREFORE, IS NO WAY, THE ORDER OF SETTLEMENT COMMISSION SUPPORT THE IN APPLICABILITY OF SECTION 68 IN APPELLANT'S CASE, AS THE ORDER OF HON'BLE SETTLEMENT COMMISSION HAS ONLY QUALIFIED SAM , COMMISSION INCOME IN THE HANDS OF SH. S.K. GUPTA. NOW COMING TO MODUS OPERANDI, THE CASH ARE DEPOSITED IN VARIOUS BANK ACCOUNTS CALLED PROPRIETARY CONCERNS, THESE PROPRIETARY BANK ACCOUNTS ARE IN THE NAME OF VARIOUS OTHER PERSONS, HAVING SEPARATE PAN ETC & SOMETIMES FILING RETURN OF INCOME ALSO. THEIR AFFIDA VIT THAT THEY AM BENAMIDARS OF SH. S.K. GUPTA DOES NOT PROVE THE CASE THAT THEY ARE BENAMIDARS, AS PAN OF THESE PERSONS HAVE NOT BEEN SURRENDERED NEITHER THEIR RETURN OF INCOME HAVE BEEN REVISED. 7 ADDITIONAL EVIDENCE FILED BY THE LD. AR DURING THE APPELL ATE PROCEEDING DOES NOT HELP THE APPELLANT. IN ADDITIONAL EVIDENCE, LD. AR HAS SOUGHT REWORKING OF CREDIT U/S 68 ON THESE COUNTS: - (I) LD. AR HAS 'CLAIMED THAT SOME OF THE AMOUNT HAS BEEN RECEIVED FROM ITS DEBTORS. ONCE THE DEBTORS ITSELF IS BOGUS, THE N HOW THE AMOUNT RECEIVED FROM SUCH BOGUS DEBTOR CAN BE TREATED AS GENUINE. NO BENEFIT CAN BE GIVEN FOR QUANTIFYING ADDITION U/S 68 ON THE BASIS. (II) INTER TRANSACTION AMONGST 32 CONDUIT CO MPANIES SHOULD BE EXCLUDED. THE ASSESSING OFFICER HAS VERIFIED T HE FIGURE. HOWEVER, IN MY VIEW, NO RELIEF CAN BE GIVEN FOR ADDITION U/S 68 OF LT. ACT, FOR INTER COMPANY TRANSFER. I WI LL BE DEALING THIS ISSUE IN NEXT PARAGRAPH OF THE ORDER. (III) THE NEXT CLAIM OF LD. AR IS ON ACCOUNT OF DISHONORED CHEQUE. THE ASSESS ING OFFICER HAS REPORTED THAT CHEQUES DISHONORED IN PUNJAB NATIONAL BANK SHOULD NOT BE ADMITTED AS DURING ASSESSMENT STAGE, IT HAS NOT OWNED ANY ACCOUNT IN PUNJAB NATIONAL BANK. AS THE APPELLANT IS FOUND ENGAGED IN THE OPERATION OF ACCOMMODATION ENTRY, THE REFORE, UNLESS THERE IS EXACT CORRELATION CHEQUE NO. WISE, RELIEF OF DISHONORED CHEQUES CAN NOT BE GIVEN ADDITION U/S 68. (IV) INTEREST EARNED BY THE APPELLANT FROM AUTO SWEEP ACCOUNT AGGREGATING TO INR 12,64,179 WHICH HAS BEEN TREATED AS UNEXPLAINED CAS H CREDIT THROUGH THIS HAS BEEN DECLARED AS INCOME IN THE RETURN OF INCOME. THEREFORE, THE SAID SUM HAS BEEN TAXED TWICE. THE LD. ASSESSING OFFICER HAS REPORTED THAT EXACT BIFURCATION OF INTEREST INCOME EARNED HAS NOT BEEN PROVIDED BY THE APPELLANT. IN MY V IEW AS THE BOOKS OF ACCOUNTS OF THE APPELLANT IS NOT RELIABLE AS THE APPELLANT ITSELF CLAIMS. THEREFORE, AUTHORITY OF ITS BOOKS OF ACCOUNTS IS NOT RELIABLE. HENCE, IN MY VIEW SUCH RELIEF CANNOT BE GIVEN. (V) TRANSFER FOR ONE BANK ACCOUNTS TO OTHER BANK AC COUNT : LD. AR ARGUED THAT CERTAIN AMOUNT HAS BEEN TRANSFERRED FROM ONE BANK ACCOUNT TO ANOTHER BANK ACCOUNT OF THE APPELLANT. THIS AMOUNT HAS BEEN TWICE IN BOTH THE ACCOUNT SEPARATELY U1S 68 OF IT ACT. IN MY VIEW IN THIS CASE ALSO, AS THE APPELLANT ITSE LF CLAIMING THAT THE BOOKS OF ACCOUNT IS NOT RELIABLE, NO RELIEF CAN BE GRANTED FOR SUCH TRANSFER. (VI) SIMILARLY, LD.AR CLAIMED THAT CERTAIN FDR AMOUNT HAS BEEN MATURED AND CREDITED IN THE BOOKS OF ACCOUNT. THE LD.AO HAS TREATED THOSE AMOUNT ALSO U/S 68. AS I HAVE HELD EARLIER THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE IS NOT RELIABLE. THEREFORE, SUCH CLAIM IS NOT ENTERTAINABLE. IN VIEW OF THE ABOVE, ADDITION OF ENTIRE DEPOSIT IN ITS BANK A/C IS LIABLE TO BE SUSTAINED U/S 68 OF THE ACT, AS THE SOURC E OF THESE CASH CREDITS ARE NOT 8 GENUINE, CREDIT WORTHINESS OF THE CREDITORS ARE NOT ONLY DOUBTFUL BUT PROVEN TO BE UNCREDIT WORTHY. TAKING ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE, I HEREBY CONFIRM THE ENTIRE ADDITION OF RS.62,70,19,448/ - WHICH IS APPEARING IN THE BOOKS OF ACCOUNTS. THESE GROUNDS OF APPEAL ARE THEREFORE DISMISSED. 3. AGGRIEVED THE REVENUE IS IN APPEAL ON THE FOLLOWING GROUNDS. 1) THAT THE LD. CIT (A) ERRED IN CONFIRMING THE ASSESSMENT ORDER PASSED U/S 143 (3) OF THE ACT ON 27.12.2010 WHICH IS BAD BOTH ON FACTS AND IN LAW; 2) THAT THE AUTHORITIES BELOW ERRED BOTH ON FACTS AND IN LAW IN MAKING AN ADDITION OF RS. 62,70,19,448/ - U/ S 68 OF THE INCOME - TAX ACT, 1961 WITHOUT APPRECIATING THE FACT THAT THE PROVISION IS APPLICABLE ONLY IN THE CASE OF CREDIT ENTRY IN THE BOOKS OF ACCOUNTS, WHEREAS IN THE INSTANT CASE, THE AMOUNTS IN QUESTION WERE ALL RECEIVED BACK BY THE APPELLANT ALONG WI TH INTEREST THEREON FROM BUSINESS CONSTITUENTS; 3.THAT THE AUTHORITIES BELOW ERRED BOTH ON FACTS AND IN LAW IN MAKING THE ABOVE ADDITION WITHOUT APPRECIATING THE FACT THAT SINCE IN THE INSTANT CASE THE ITEMS WERE OUTSIDE THE PURVIEW OF SECTION 68 OF THE A CT AND SO THERE WAS NO ONUS ON THE APPELLANT TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE PAYER; 4) THAT THE FACTS HAD TO BE SEEN IN TOTALITY AS THE DOCTRINE OF APPROBATE AND REPROBATE PROHIBITS THE REVENUE DEPARTMENT FROM BLOWING HOT AN D COLD IN THE SAME BREATH THEREBY ACCEPTING ONE PART OF THE TRANSACTION AS CORRECT AND NOT ACCEPTING THE OTHER PART AS VALID. WHEN THE ACCOUNT ITSELF HAD BEEN ORIGINALLY ACCEPTED, THE TRANSACTIONS OF REPAYMENT OF SUCH LOANS/ADVANCES CANNOT BE DOUBTED AND T HE AMOUNTS RECEIVED ON ACCOUNT OF INTEREST INCOME, WHICH HAD BEEN DULY TAXED IN THE RETURN OF INCOME FILED FOR THE INSTANT YEAR AND SO THE ADDITION MADE U/S 68 OF THE ACT IN RESPECT THEREOF WAS ERRONEOUS AND UNCALLED FOR AND MUST BE QUASHED; 5) THAT WITHO UT PREJUDICE TO THE OTHER GROUNDS, THE AUTHORITIES BELOW ERRED BOTH ON FACTS AND IN LAW IN MAKING AN ADDITION OF RS. 62,70,19,448/ - U/S 68 OF THE ACT WITHOUT APPRECIATING THE FACT THAT A SUBSTANTIAL PORTION OF BOTH 9 PAYMENT OF ADVANCE AND RECEIPT THEREOF IS IN THE SAME FINANCIAL YEAR AND CANNOT BE TAXED MULTIPLE TIMES; 6) THAT WITHOUT PREJUDICE TO THE OTHER GROUNDS THE AUTHORITIES BELOW ERRED BOTH ON FACTS AND IN LAW IN MAKING AN ALLOWANCE OF ONLY RS. 5,21,35,000/ - PURSUANT TO TRANSFER OF FUNDS FROM ONE AC COUNT TO ANOTHER WITHOUT APPRECIATING THE FACT THAT A MUCH LARGER AMOUNT OF FUNDS HAD BEEN TRANSFERRED FROM ONE BANK ACCOUNT TO ANOTHER; 7. THAT WITHOUT PREJUDICE TO THE OTHER GROUNDS OF APPEAL THE CIT (A) ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE PROTECTIVE ADDITION OF RS.19,55,41,190/ - AS MADE BY THE ASSESSING OFFICER; 8). THAT THE CIT(A) ERRED IN NOT ALLOWING RELIEF IN RESPECT OF: A) RS.L ,50,87,000/ - ON ACCOUNT OF TRANSFER OF FDR TO BANK ACCOUNT; B) RS.12,64,797/ - ON ACCOUNT OF INTEREST RECEIV ED ON FDR; 9) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, SUBSTITUTE, DELETE AND MODIFY ANY OR ALL THE GROUNDS OF APPEAL, WHICH ARE WITHOUT PREJUDICE TO ONE ANOTHER, BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 4 . WE HAVE HEARD SHRI K.SAMPATH, THE LD.COUNSEL FOR THE ASSESSEE AND SHRI RAVI JAIN, CIT, D.R. ON BEHALF OF THE REVENUE. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF MATERIAL ON RECORD, ORDERS OF LOWER AUTHORITIES, CASE LAWS CITED, WE H OLD AS FOLL OWS. 5 . WE FIND THAT THE ISSUE IN QUESTION IS COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF PRO CIT VS. VIJAY CONDUCTORS INDIA PVT.LTD. IN ITA 683/2015 ETC. JUDGEMENT DATED 6 TH OC TOBER, 2015, WHEREIN THE HON BLE HIGH COURT HAD UPHELD THE ORDER OF THE TRIBUNAL BY HOLDING AS FOLLOWS. 4. THE COMMON ISSUE IN ALL THE APPEALS ISSUES CONCERNS THE ADDITIONS MADE UNDER SECTION 68 OF THE INCOME TAX ACT ('ACT') WHICH WAS DIRECTED TO BE DELE TED BY THE ITAT . 10 5. A SURVEY WAS CONDUCTED BY THE INVESTIGATION WING OF THE DEPARTMENT UNDER SECTION 133A OF THE ACT IN THE OFFICE PREMISES OF ONE MR. S.K. GUPTA WHO WAS IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES TO VARIOUS PERSONS. DURING THE SU RVEY, SEVERAL DOCUMENTS, PAPERS, LAPTOPS CONTAINING THE ACCOUNTS OF SEVERAL PARTIES WERE IMPOUNDED. AN APPLICATION WAS FILED BY MR. GUPTA BEFORE THE SETTLEMENT COMMISSION IN WHICH HE ADMITTED TO CARRYING ON THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES O N WHICH COMMISSION/BROKERAGE WAS RECEIVED BY HIM. 6. THE ITAT REFERRED TO THE ORDER DATED 28TH DECEMBER 2010 OF THE SETTLEMENT COMMISSION WHICH RECORDS INTER ALIA THAT MR. GUPTA WAS AN ENTRY PROVIDER AND THAT IN HIS CASE ONLY THE AMOUNT OF PREMIUM/COMMISSION RECEIVED BY HIM AFTER REDUCING EXPENSES INCURRE D WOULD BE HIS ADDITIONAL INCOME. THE ORDER OF THE SETTLEMENT COMMISSION ALSO GAVE A LIST OF THE CONCERNS CONTROLLED BY MR. GUPTA WHICH INCLUDED THE PRESENT ASSESSEES. THESE COMPANIES/ENTITIES WERE USED BY MR. GUPTA AS CONDUIT FOR ISSUE OF CHEQUES TO THE B ENEFICIARIES . 7. THE ASSESSING OFFICER (AO) GAVE EFFECT TO THE ORDER OF THE SETTLEMENT COMMISSION AND DETERMINED THE INCOME OF MR. S.K. GUPTA WITHOUT MAKING ANY ADDITION FOR UNEXPLAINED CASH CREDIT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF THE INTE RMEDIARY COMPANIES, INCLUDING THE RESPONDENT ASSESSEES, THE AO SOUGHT DIRECTIONS FROM THE ADDITIONAL COMMISSIONER OF INCOME TAX UNDER SECTION 144 - A. THE ADDITIONAL CIT ' PASSED AN ORDER IN WHICH AFTER DISCUSSING THE FACTS HE INTER ALIA DIRECTED THAT IT WOU LD BE IN THE BEST INTEREST OF THE REVENUE TO TAX THESE TRANSACTIONS IN THE HANDS OF BENEFICIARIES AND MR. S.K. GUPTA 'WITHOUT MAKING ANY ADDITIONS ON THIS ACCOUNT IN THE HANDS OF CONDUIT ENTITIES'. THE SAID ORDERS OF THE SETTLEMENT COMMISSION OR OF THE ADD ITIONAL CIT WERE BINDING ON THE AO. 8. IT IS NOT IN DISPUTE THAT THE RESPONDENT ASSESSEES ARE THE CONDUIT ENTITIES AND NOT THE BENEFICIARIES. CONSEQUENTLY, THE ORDER OF THE ITAT DELETING THE ADDITION UNDER SECTION 68 OF THE ACT IN THEIR HANDS DOES NOT SUFFER FROM ANY LEGAL INFIRMITY. ( EMPHASIS OURS). 11 6 . RESPECTFULLY FOLLOWING THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PRO CIT VS. VIJAY CONDUCTORS INDIA PVT.LTD. AND OTHER CASES (SUPRA), WE DELETE THE ADDITION AND ALLOW T HE CLAIM OF THE ASSESSEE. 7 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01 ST MARCH , 2016 . SD/ - SD/ - ( H.S. SIDHU ) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 01 ST MARCH , 2016 MANGA COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR